Benchmark crude oil prices are rising on Monday morning after a jump last Friday.
The price of January futures for Brent on the London ICE Futures exchange at 7:11 a.m. was $81.16 per barrel, which is $0.55 (0.68%) higher than at the close of the previous session. Last Friday, these contracts jumped in price by $3.19 (4.1%) to $80.61 per barrel.
Quotes for January futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) at the specified time increased by $0.53 (0.7%) to $76.57 per barrel. At the end of the previous session, they rose by $2.99 (4.1%) to $75.89 per barrel.
Due to the active rise on Friday, both brands minimized the weekly decline. Over the past week, Brent prices fell by 1%, WTI – by 1.7%.
The sharp rise in quotations on Friday was caused by rumors that OPEC+ could extend oil production cuts for several months or increase the volume of fuel production cuts.
“Anyone who has been trading oil for at least 10 years will remember the Thanksgiving Day shock of 2014 when OPEC abandoned production quotas and plunged prices from $80 to around $45 per barrel in a matter of weeks,” Sevens Report Research editor Tyler Ritchie told MarketWatch.
“The risks are now tilted in favor of the bulls, as tighter production restrictions will push futures back to $100 per barrel,” he added.
At the same time, data from the oilfield services company Baker Hughes showed that the number of oil rigs operating in the United States increased by six last week, the highest rate since February, and amounted to 500 units. The number of gas rigs, meanwhile, fell by four to 114, the lowest level since early September.
Benchmark oil prices are rising moderately on Wednesday morning, as investors assess US inflation data and await the weekly report on fuel stocks in the country.
The price of January futures for Brent on the London ICE Futures exchange at 7:10 a.m. is $82.7 per barrel, which is $0.23 (0.28%) higher than at the close of the previous session. On Tuesday, these contracts fell by 5 cents to $82.47 per barrel.
Quotes for December futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) by this time increased by $0.18 (0.23%) to $78.44 per barrel. At the end of the previous session, they remained unchanged at $78.26 per barrel.
The rate of growth of consumer prices (CPI) in the United States in October decreased to 3.2% in annual terms from 3.7% in September, the Labor Department reported. Core inflation (CPI Core), which excludes food and energy prices, slowed to 4% from 4.1% a month earlier. The consensus forecast of experts surveyed by Trading Economics envisaged a weakening of inflation to 3.3% and a continued growth rate of the CPI Core index at 4.1%.
Data on inflation dynamics is closely monitored by the Federal Reserve System (FRS) when making decisions on monetary policy.
Meanwhile, the day before, the International Energy Agency raised its forecast for global oil demand growth in 2023 by 113 thousand barrels per day (bpd) to 2.367 million bpd. Thus, the organization expects global demand to reach 101.96 million bpd this year.
Market participants are also assessing signals about changes in energy reserves in the United States.
According to the American Petroleum Institute (API), last week the US stocks increased by 1.34 million barrels. A week earlier, reserves jumped by 11.9 million barrels.
Official data from the Energy Ministry will be published at 16:30 on Wednesday, and in two weeks at once. Analysts surveyed by Trading Economics predict that they will show an increase in oil reserves by 1.8 million barrels.
Benchmark oil prices continued to decline slightly during trading on Wednesday after they plummeted to their lowest levels since July 21 a day earlier.
Quotes for January futures for Brent on the London ICE Futures exchange as of 7:05 a.m. amounted to $81.58 per barrel, which is $0.03 (0.04%) below the price at the close of the previous session. On Tuesday, these contracts fell by $3.57 (4.2%) to $81.61 per barrel.
The price of December futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) in the morning fell by $0.21 (0.27%) to $77.16 per barrel. At the end of the previous session, it fell by $3.45 (4.3%) to $77.37 per barrel.
On Tuesday, the US Department of Energy downgraded its forecast for Brent prices for the current year to $83.99 per barrel from $84.09 per barrel, and for 2024 to $93.24 per barrel from $94.91 per barrel. The estimate for WTI for the next year has been downgraded by 1.8% compared to the October forecast – to $89.24 per barrel.
Among the factors that put pressure on oil prices, the agency notes a decline in global reserves, risks of supply disruptions, and the impact of voluntary production cuts by a number of OPEC+ countries.
Oil prices are falling on Tuesday after a slight rise in the previous session amid decisions by Saudi Arabia and Russia to extend voluntary production cuts.
The cost of January futures for Brent crude oil on the London ICE Futures exchange as of 7:10 a.m. on Tuesday amounted to $84.77 per barrel, which is $0.41 (0.48%) lower than at the close of the previous session. On Monday, the price of these contracts rose by $0.29 (0.3%) to $85.18 per barrel.
December futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) fell by $0.36 (0.45%) to $80.46 per barrel by this time. As a result of the previous trading, the value of these contracts increased by $0.31 (0.4%) to $80.82 per barrel.
The market is under pressure from fears of a weakening global economy and, consequently, oil demand. “Weak economic expectations are holding back the oil market and justifying the position of OPEC+ countries limiting production,” OANDA analyst Craig Earlam said, as quoted by Market Watch.
Last weekend, it became known that Saudi Arabia decided not to change the volume of voluntary oil production cuts and will keep it at 1 million bpd until the end of 2023.
In December, Riyadh may review the parameters of the restrictions to make a decision either to deepen the reduction or to increase production, the Saudi state agency reported on Sunday, citing an official source in the country’s Energy Ministry.
Saudi state-owned Saudi Aramco said on Monday that it will keep the price of the main grade of oil supplied to Asia, Arab Light, unchanged in December. The price of this grade for Asian buyers has been rising for five months in a row.
The Russian Federation will extend until the end of December 2023 an additional voluntary reduction in the supply of oil and oil products to world markets by 300 thousand barrels per day, which came into effect in September and October 2023.
Oil prices are rising on Monday after a sharp decline last week.
The cost of January futures for Brent on the London ICE Futures exchange as of 7:10 a.m. on Monday amounted to $85.3 per barrel, which is $0.41 (0.48%) higher than at the close of the previous session. On Friday, the price of these contracts fell by $1.96 (2.3%) to $84.89 per barrel.
December futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) rose by $0.5 (0.62%) to $81.01 per barrel by this time. As a result of the previous trading, the value of these contracts fell by $1.95 (2.4%) to $80.51 per barrel.
Last week, Brent lost 4.8%, WTI – 5.9%, according to Dow Jones.
Concerns about the escalating conflict in the Middle East have eased somewhat, and traders’ attention has shifted to the prospects for oil supply and demand on the global market, Market Watch notes.
On Sunday, the Saudi state agency reported, citing an official source in the Ministry of Energy, that the country would not change the volume of voluntary oil production cuts, and would keep it at 1 million bpd until the end of 2023. At the same time, the source noted that in December, Saudi Arabia will review the parameters of the restrictions in order to make a decision either to deepen the reduction or increase production.
Oil prices are falling on Monday, despite Israel’s expansion of ground operations in the Gaza Strip, to which Iran has already responded with threats.
Israeli Prime Minister Benjamin Netanyahu announced over the weekend that the country’s authorities had decided to move to the second phase of the operation, which will involve more troops directly in the Gaza Strip. Earlier, the Israeli Defense Forces (IDF) conducted a series of raids in the Gaza Strip.
Oil prices are falling as Israel “seems to be taking a cautious approach to the situation, which gives hope that the worst-case scenario of the conflict will not materialize,” said Stephen Innes, managing partner at SPI Asset Management. Investors, however, should remember “that this is likely to be a long and protracted conflict,” the expert said, as quoted by Market Watch.
The cost of December futures for Brent crude oil on the London ICE Futures exchange as of 7:15 a.m. on Monday is $89.27 per barrel, which is $1.21 (1.34%) lower than at the close of the previous session. On Friday, the price of these contracts increased by $2.55 (2.9%) to $90.48 per barrel.
December futures for WTI in electronic trading on the New York Mercantile Exchange (NYMEX) fell by $1.3 (1.52%) to $84.24 per barrel by this time. As a result of the previous trading, the value of these contracts increased by $2.33 (2.8%) to $85.54 per barrel.
Over the past week, Brent fell by 1.8% and WTI by 2.9%.
Investors are most concerned about the possibility of Iran’s direct involvement in the conflict between Israel and Hamas. Tougher sanctions on Iranian oil could lead to a reduction in the supply of raw materials on the market by 1 million barrels per day. If the conflict escalates, the country could threaten transportation hubs and oil infrastructure in the region, Market Watch notes.
